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Federal Agencies Finalize the Volcker Rule 

February 13, 2014
Thomas A. Bausch, Christopher M. Cahlamer, Carol A. Gehl, Susan Hoaglund, Godfrey & Kahn S.C - The National Law Review

Five financial regulatory agencies adopted final rules implementing a provision of the Dodd-Frank Act, commonly referred to as the Volcker Rule. The final rules generally prohibit banking entities from:

  • engaging in short-term proprietary trading of securities, derivatives, commodity futures and options on these instruments for their own account; and
  • owning, sponsoring or having certain relationships with hedge funds or private equity funds (referred to as “covered funds”).

As required by the Dodd-Frank Act, the final rules provide exemptions for certain activities, including market making, underwriting, hedging, trading in certain government obligations and organizing and offering a hedge fund or private equity fund, among others. Like the Dodd-Frank Act, the final rules limit these exemptions if they involve a material conflict of interest; a material exposure to high-risk assets or trading strategies; or a threat to the safety and soundness of the banking entity or to U.S. financial stability.

Read more: The National Law Review


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